Caroline’s questions…

The highly successful blogger Ruth Dela Cruz, herself an IBM Corporate Service Corps alumna, gave me advice early on that to hold people’s interest I needed to season my writing liberally with photos and graphics,  and since following her advice my readership has jumped up substantially. This post, however, will have to be an all-text post, so my apologies to Ruth and the rest of you….

Caroline Ashworth is a good friend of the family who has been following this blog since I started it.  Yesterday on Facebook she sent me the following post:

I don’t understand why your assignment location is so far away and others as well.

Do IBM consider local need or the environment in which those selected to participate in this programme live and work?  The realities of each individual’s daily need?

What about philanthropy?

Is this project an act of philanthropy? Or do the destinations selected pose viable for future IBM revenue?

Sorry but I have been reading your blogs and am not sure I have captured the essence of purpose of all this.

Not to say that I haven’t found you blogs very interesting though.

It feels like they set the criteria for selection so high that as an outsider it looks like and internal award ceremony for the Victoria Cross.

What are the proposed outcomes of it and objectives?

Just trying to understand it better that’s all.

Caroline runs a local organization called Bringing Communities Together,  which develops and delivers short tailor made learning programs, activities and events that benefit families and the wider community. So she is no stranger to community support work , and she raises some good questions and some fair challenges. I’d like to respond to them here.  Many of these questions are connected, and I see three main themes here:

  • What is the goal? Is the IBM Corporate Service Corps philanthropy or strategic investment?
  • How does IBM decide which communities to invest in?  I also think there is an implied challenge here: why isn’t IBM investing locally instead of to the far-flung corners of the world?
  • Within each community, how does it decide which businesses/schools/organizations to work with?
  • Why does IBM set the barriers of participation so high?

What is the goal? Is the IBM Corporate Service Corps philanthropy or strategic investment?

IBM is a public corporation, owned by its individual shareholders.  These are people like you and me.  In fact they are you and me.  I own IBM stock, and any of you around the world whose retirement savings are invested in any major mutual fund are also likely to be part owners of IBM.  We invest money in IBM, and IBM agrees to do their best to give us a return on our investment, either through dividends or appreciation in the stock price.  If an IBM officer or employee takes our money and uses it for another purpose (e.g. sending the kids to university, taking a holiday in Tahiti, or remodeling a backyard tennis court), there is a word for that: embezzlement.  Which is just a fancy word for theft.  Even if this embezzler is a higher-minded individual and uses the money to start a center for the homeless instead of lining their duck pond, the principle is still the same (see my post Corporate Philanthropy: A Walk on the Dark Side for more on this topic)

The only defensible way that a publicly held corporation can engage in any kind of philanthropy is by clearly demonstrating that doing so will have a direct impact on the return to its shareholders.  This return does not have to be monetary: the highly successful initiative to get institutional investors to divest stock of any company doing business with the apartheid regime of South Africa is a great example of this.  But nevertheless, a company’s philanthropic investments have to be clearly tied to either principles or objectives that shareholders approve of.

So the answer to this first question is that the IBM Corporate Service Corps is philanthropic in that it gives away free services that IBM can and does otherwise charge for, to communities and organizations that could otherwise perform them.  But the CSC is by no means a random act of kindness; it is a strategic investment that IBM hopes to benefit directly from in several ways:

  • By targeting communities and organizations that have the potential to grow into paying IBM clients, and directly helping them succeed in that growth
  • To contribute directly to IBM’s good reputation and brand awareness, both of which are clear differentiators from its main competitors
  • To enhance the global effectiveness of its employees by giving them hands-on experience in radically different cultures and operating models

How does IBM decide which communities to invest in?  I also think there is an implied challenge here: why isn’t IBM investing locally instead of to the far-flung corners of the world?

Let me answer the challenge first, because it is an important one.  IBM does act locally.  Corporate responsibility is a good example of the non-monetary returns that many of today’s shareholders demand on their investments.  IBM invests heavily in local concerns, particularly in the areas of education and the environment.  In fact, with specific regard to you and your organization Caroline, there is a program called On-Demand Community that lets me directly nominate individual community organizations for small grants in exchange for a commitment of volunteer service; let’s talk about how I might be able to do something for Bringing Communities Together next year.

The other thing to remember is that IBM is a global company with a direct presence in 170 countries.  So in a very real sense, every CSC deployment is local.  My deployment in China, the teams currently deployed in Ghana and Kazakhstan, previous CSC deployments to dozens of other countries, all of these are backed by local IBM offices in those places.  Those local offices are led by local community members, and get the credit for bringing in teams of international

So why don’t the local offices mobilize local IBM employees to work directly in their own communities?  Surely that would be far cheaper, and it would allow those precious relationships to be built by the IBM’ers most directly placed to capitalize on them.  Well, I do not run the CSC, nor am I the one deciding its investment strategy, but I would speculate that this decision was taken for two reasons:

  • Distribution of skills.  IBM has many different product offerings: hardware, software, consulting, research, even advertising (I believe IBM Interactive is the fifth largest online advertising agency).  These capabilities are not evenly distributed across IBM offices around the world.  In my own specialty, CRM, such skills are decidedly localized.  The Corporate Service Corps provides an infrastructure for getting individual skill sets where they are needed the most.
  • Investment in cultural awareness and global capability.  IBM needs leaders who can design, deliver, and operate large, geographically distributed solutions.  By sending prospective leaders to areas far outside their normal operating environment, IBM is building this capability as directly as possible.

Within those communities, how does it decide which businesses/schools/organizations to work with? 

This sort of assessment is not within IBM’s core competency.  And while IBM has offices in most of the regions the CSC deploys into, these offices do not usually have the sort of logistics expertise to successfully manage the sort of large multinational deployments that the CSC requires.  So to help with this aspect of the operation, IBM partners with major NGO’s who do have their core competency in these areas.  The NGO that I will be working with in my deployment is called the Digital Opportunity Trust (see my previous blog post Meet the Digital Opportunity Trust for more about them).

Why does IBM set the barriers of participation so high?

Well, with regards to Caroline’s initial query, I think that obtaining a Victoria Cross is still quite a bit more difficult :-)  Let’s put some numbers to things here.  To be eligible for the CSC you have to have been within the top 25% of performers worldwide for at least two of the past three years.  IBM employs about 420,000 people, so if you assume most people’s performance ratings are relatively stable then there will be about 100,000 people each year that are potentially eligible to participate.  IBM has budgeted around $50M for the CSC as a whole, which allows for several hundred people to be deployed each year.  So the bar is not set impossibly high, but selection is still highly competitive.

How does IBM decide who to select? As I referred to above, IBM considers the Corporate Service Corps to be first and foremost a leadership program.  In this regard it has two aims:

  • To makes its leaders better prepared for true global operations
  • To retain those top performers and keep them from moving to IBM’s competitors

The first goal is hard to measure, since there is no effective way of comparing the results to a control group.  The second goal is much simpler to measure and the results speak for themselves…

Of the roughly 2,000 people who have successfully completed a CSC deployment since the program began in 2008, not a single one has left IBM.

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One thought on “Caroline’s questions…

  1. Wow, your last sentence is a huge testament to the value of the CSC. Engaging employees in a meaningful way and retaining the best and brightest also feeds directly into the IBM bottom line. I wish more companies “got” this concept.

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